Industry bio

The bio-health component of biotech is enjoying impressive growth, especially in Greater Madison.

From the pages of In Business magazine.

When it comes to fixing what ails our health care system, the state’s biotechnology industry takes a back seat to nobody. Perhaps that’s because such a significant subset of biotech operates in the realm of bio-health, from early-stage research to the management of health care.

Wisconsin has strength and diversity across a broad spectrum of health care solutions, notes Lisa Johnson, CEO of BioForward Wisconsin. The terms biotechnology, biosciences, and life sciences tend to be narrower in definition than the type of companies that fall under those definitions, and they tend to exclude health tech — sometimes known as digital health, health IT, and medical device companies.

As a result, BioForward has been promoting that Wisconsin has broad strength across a range of health care products and services, which it defines as the bio-health industry. “It’s an intersection of biosciences, biopharma, digital health, medical devices, bio-manufacturing, and diagnostics,” she explains. “These sectors are all converging to form Wisconsin’s prominent role in integrated health solutions.”

Greater Madison has long boasted employers engaged in sophisticated science and that extends to the bio-health realm. As Johnson explains, medical innovation starts with research and development and products and services that sell into the research market and is aided and abetted by cutting-edge research taking place at UW–Madison. Madison’s strength in the biosciences — primarily research reagents, tools, and instrumentation — sells into the “R&D” market, including established companies such as Promega, Thermo Fisher, Fujifilm-CDI, and Roche-Nimblegen. Meanwhile, businesses such as Exact Sciences and Luminex operate in the realm of medical condition diagnosis.

While Wisconsin does not have major pharmaceutical companies — they are concentrated in Chicago, Indianapolis, Boston, and New Jersey — its companies offer products and services related to therapeutics or bio-pharma. Local companies help therapeutics be delivered to the market because they must go through drug development, clinical trials, and be tested for toxicity.

Enabling discovery

Drugs also need to be produced containing the ingredients defined by the protocol to produce a specific drug, and these ingredients are known as active pharmaceutical ingredients.

With the help of APIs, Scientific Protein Labs is a biotechnology company that makes possible the treatments and cures developed by the big names in pharma. Mike Reardon, chief commercial officer for SPL, says the company’s future will probably be different than its first 40 years. With several new product developments about to come to fruition, he can’t yet say exactly how different, but he knows the Waunakee-based company won’t stray too far from its history as a supplier to the pharmaceutical industry.

The company sells products to the pharmaceutical, veterinary, and food industries, but more than 95% of its products are sold to pharma companies, which uses SPL’s products to formulate drug therapies.

Among the APIs it manufactures are heparin and pancreatin. Heparin, one of the world’s most important drugs, is an anticoagulant (blood thinner) that prevents the formation of blood clots during surgical procedures. Pancreatin consists of natural digestive enzymes that help the body break down and digest food when the pancreas cannot release enough of the same digestive enzymes into the stomach.

Cystic Fibrosis patients, for example, need pancreatic enzymes because the same mucous that lines their lungs also impairs the pancreas, inhibiting the pancreas from effectively secreting digestive enzymes. “Years ago, before pancreatin, people with CF would die young because they could not digest their food,” Reardon notes. “The introduction of pancreatic enzymes changed that dynamic significantly.”

Scientific Protein Labs was actually started by Oscar Mayer in collaboration with UW–Madison and has been owned by a combination of private companies and private equity firms. Hepalink, a publicly traded Chinese company that happens to be a major heparin player, now synergistically owns SPL. With approximately 180 employees reporting to work at its Waunakee manufacturing facility and 35 in Sioux City, Iowa, the company is optimistic about its business prospects and is looking to hire additional people starting this year.

While it recruits to bolster its workforce, it’s also scouting for additional collaboration partners such as Curemark LLC, a New York-based biotech. SPL’s products are being used in clinical trials related to a Curemark product targeting autism. Many children with autism suffer from impaired protein digestion, which affects the availability of essential amino acids in the body, and Curemark has developed a proprietary enzyme to enhance protein digestion and restore the pool of essential amino acids that play a role in the expression of genes important to neurological function.

“Its different than traditional enzyme products on the market in that it has a completely different focus and formulation,” Reardon notes. “They have been developing a product to treat the aspects of autism for over 10 years, and they are getting pretty close.”

Aldevron: Basis for breakthroughs

Another local enabler of discovery is Aldevron, a contract research and manufacturing organization that provides biologics products such as plasmid DNA, proteins, and antibodies to life science suppliers and researchers in the pharmaceutical and biotechnology industries.

Aldevron scientist Courtney Rockwell at work in the company’s Madison lab at University Research Park.

The company is headquartered in Fargo with an office in Madison that’s focused on gene editing and the manufacture of recombinant antibodies. Due in part to the promise of gene editing and gene therapy, its vision as a company is to cure 10 million people by 2025. Among the ways it hopes to do that is by supplying its products, which are used to advance research at client operations, and by producing materials used in the development of drug therapies that are being tested in Phase I and Phase II clinical trials. Among the disease targets of clinical trials involving Aldevron’s customers are cancer and sickle cell anemia.

Aldevron was founded in 1998 in a small lab at North Dakota State University with a vision of being a global supplier of biological tools and the overriding motivation to help cure people, and its recent focus on gene editing and gene therapy has provided added incentive. The latter was made possible by the sequencing of the human genome and the knowledge there are roughly 10,000 genetic diseases where the cause of the disease is an incorrect DNA sequence. “Now that gene therapy and gene editing have advanced so quickly in the past couple of years, we’ve being able to execute on that vision also,” notes Tom Foti, vice president and general manager for Aldevron.

The company recently launched a new product called SpyFi Cas9 Nuclease, which represents a new strategic focus. It’s an enzyme that allows scientists to conduct gene editing with more precision. In addition to editing specifically where it’s supposed to cut the DNA sequence, it has reduced off-target effects. “These reduced off-target effects are very important since you do not want the enzyme to cut the DNA in the wrong spot,” Foti explains.  “This increased precision, or fidelity, is why we are very excited about this new product.”

Foti was able to convince CEO Michael Chambers to open a protein services division in Madison due to local scientific expertise in proteins, the number of Madison area clients, access to university graduates, and an existing collaboration with the Saha Lab at the Wisconsin Institutes for Discovery. Aldveron employs 200 people, including 20 in its University Research Park facility here, and is expanding its manufacturing facility in Fargo and looking for a larger facility in Madison.

“Since 2012, we have doubled our workforce,” Foti notes, “but our revenues have grown by a factor of six.”

(Continued)

Its Forte is research

Eighteen years into a venture called Forte Research, Founder Shree Kalluri is still living the dream. If Kalluri, whose titles also include president, CEO, and chief customer officer, is pinching himself, it’s probably due to the client company his firm keeps.

Forte develops and markets software for three primary areas: clinical trial management, clinical data management, and research administration. Its flagship product, OnCore, is the most widely adopted, enterprise-class clinical research platform among cancer centers, major academic medical centers, and health systems. Among its clients are Dana-Farber/Harvard Cancer Center, Yale University, the University of Wisconsin–Madison Carbone Cancer Center, and Stanford University.

“We’re primarily focused on impacting clinical research at these organizations,” Kalluri states. “That’s our goal. We started expanding by introducing new products and technology to make them very strong in these areas. The main goal is to discover what we can do to empower their research and really make them shine in what they do.”

One reason Forte has strategic relationships with these customers is that they ask the Madison company for help in solving their problems. When Forte develops a new software product, the majority of time it stems from a customer cry for help. “They trust us to do that because of the strong relationships that we’ve built,” Kalluri notes, “but there are other times when we come up with something because we believe this is a trend and it’s where the industry is going to head.”

About 13 months ago, the company saw a need for electronic regulatory management. Historically, there has been a lot of paperwork in this area, and now everything is becoming more electronic, so Forte asked customers if they would have an interest in a new technology component to address this. “After one email notice, 125 people showed up on the call, and after the call 17 different institutions signed up for collaboration to work with us to develop the product,” Kalluri says.

Forte has close to 180 employees in Madison and another 50 in its Bangalore office in India. Kalluri, who founded the company in 2000, is bullish on Forte’s business prospects, especially since its growth has doubled every three years. It has 66% of the designated cancer centers nationally, and more than one-third (34%) of the National Institutes of Health clinical and translational grant recipients are its customers.

Recent consolidation in the health care industry has worked in its favor. “Health systems have become larger and larger, and they are conducting more research because of all the consolidation,” Kalluri notes. “Managing this becomes large and complex, and they need our products even more.”

Instruments of life

You’ll have to excuse employees of Gilson Inc. if they realize they are standing on the broad shoulders of an inventive giant. The Middleton company was founded by the late Dr. Warren Gilson, a professor of experimental physiology at UW–Madison who designed and built physiological recorders used by students.

Collaborating with colleagues in the Institute of Biochemistry, Dr. Gilson developed solutions to difficult problems scientists were facing in the lab. “The increased demand for instrumentation led him to start a new operation, the one we are still in today in Middleton,” notes current CEO Nicolas Paris. The 70-year-old company is still family owned — the third generation is taking the succession, actively working at key positions in the company — and continues to manufacture analytical instrumentation for the pharmaceutical and biotech industries.

The product line includes instruments such as pipettes, fraction collectors, detectors, pumps, injectors, and the Pipetman manual liquid handlers, which have led the market for decades and probably are the best known and most widely used Gilson product. “Over the years, Dr. Gilson kept creating significant and original instrumentation that drove the company to specialize in supporting the basic and applied research labs with the simple tools they need to handle liquid precisely and accurately,” Paris states, “and to help in the sample preparation phase with key techniques like purification and extraction of small and large molecules.”

Having been granted over 750 patents, the company’s focus on making lab life easier has not changed, but Paris notes it takes different forms in the 21st century. Its spirit of inventiveness lives on with an open-source laboratory notebook, sciNote, to help scientists manage all the data they acquire from bench work and experiments, translate them into actionable reporting, and share with peers. “This software is linked to Gilson’s connected bench instruments, another market première,” Paris notes.

Firmly entrenched in the global top 100 of analytical and lab instrumentation companies, Gilson has 600 employees split over four centers of development and manufacturing — three in France and one in the U.S. — and it has four regional market organizations in covering the Americas, Europe, China, and Asia-Pacific/Africa. It is active in more than 80 countries and grows at an average annual rate of 5%.

New approaches include liquid handling at the lab bench, updated purification and extraction techniques, and a line of services ranging from maintenance and calibration to data management in the lab. “We want to help solve the reproducibility crisis the research labs are facing today by providing the instruments that are highly accurate, precise, and durable, and by providing the service and the support they need to make the best out of them,” Paris states.

No doubt Dr. Warren Gilson would have approved.

Paging Dr. Wellbe

While Epic, a maker of electronic medical records software, is the largest established company in the health care management segment, Forward Health and Wellbe are among the most promising emerging-growth companies.

Those old enough to remember the Emmy-winning Marcus Welby, M.D. television series, or nostalgic enough to watch old episodes on YouTube, understand why a health care IT business would want to have a similar sounding name. The kindly family doctor who had all the answers and eagerly made house calls became an iconic model for how medicine should be practiced.

James Dias, founder and CEO of the Madison-based Wellbe, embraces the spirit of Robert Young’s fictional character. Wellbe’s cloud-based technology platform is designed to give providers the ability to coordinate and monitor large patient volumes more effectively, but also to enable patients to participate as partners in their care.

Dias refers to it as a connected care platform and notes that an enormous amount of new innovation has been added, primarily to address customers’ emerging expectations and requirements. One new feature is called the peri-operative surgical home, which tries to evaluate patients’ risk for negative surgical outcomes, and mitigate those risks by putting patients on a special program to make them stronger for surgery.

Such optimization programs are now part of technology-enabled care plans, including the use of video, to help patients understand what their particular surgical procedure entails, what they need to do beforehand with medications and lab work, and what to expect with post-operative recovery and rehabilitation.

Building on top of its base product will be a constant focus of Wellbe, which now employs 25 people, as it works to transform how consumers experience modern health care. However, building tools that empower consumers in a seamless way will not alone spell success. Dias acknowledges that Wellbe expected more adoption of its products based on the result of regulatory reforms adopted by CMS under President Obama, and Medicare’s aggressive posture to improve care coordination by changing its payment model. The pace of adoption in 2017 was about the same as it was in 2016 — good but not the fast growth Wellbe anticipated.

“We thought those changes and that reimbursement model would create a lot more demand for our tools,” he says, “but the [presidential] administration changed, they shifted priorities around, they are playing around with the ACA, and it has created a lot of uncertainty.”

Health care is still going through a massive transformation from a fee-based system to more of a value-based model, and it remains a very dynamic marketplace with necessary structural shifts and competing investment priorities. On the positive side, Dias sees more government reimbursements being made for technology, certain kinds of electronic data, and telemedicine. “We are hanging in there, battling it out, and trying to make our case to show them the value of our tools, how we can improve patient loyalty, and how we can become part of the equation.”

Forward thinking health

Michael Barbouche traces the origins of his population health management business, Forward Health Group, to an initiative that’s still going strong today. It’s called the Wisconsin Collaborative for Healthcare Quality, and Barbouche helped WCHQ build the foundation for data use across different health systems.

“In the 2006–08 period, every conversation I had was about the need to fill the void here,” recalls Barbouche, founder and CEO of Forward Health. “We’ve got to bring the data to the care team so they can schedule patients and we’re not really seeing a lot of entities tackling that, and that’s what spurred us to start a company.”

Barbouche launched Forward Health Group in 2009, and at about the same time there was an enormous push by the new Obama administration to make the physician experience more electronic. Barbouche calls that investment a deferred infrastructure bill that has played out over the past decade, deploying tools like Epic’s medical record software nationwide. “It hasn’t made it to every practice,” he notes, “but it has made it to a lot of practices.”

Now that it has, Forward Health Group is trying to help medical practitioners make sense and make use of the increasing volume of data produced on EMRs in ways that will lead to better health outcomes and moderate the cost of care.

Forward Health Group employs 34 people and like many local biotech firms, it’s now hiring. It offers two main software products — Population Manager and Population Compass. Population Manager is a workflow supporting efficiency tool that’s primarily fed off clinical data. Population Compass is entirely about the patient’s care journey, including the different places they have gone and how turbulent those transitions of care can be, and it’s built off of claims data. “Our argument is any health care group, no matter how big or small, rural or urban, is not going to solve the challenges we face unless they are using both buckets of data — clinical and claims,” Barbouche states.

The company has clients nationwide, but it’s a medical practice in rural Georgia, a very challenged region without good access to care, that brings a smile to Barbouche’s face. “They have among the highest rates of colorectal cancer screening in the country, and that’s awesome for a challenged population,” he notes. “We get pretty tickled when they send us photos when the NIH or the CDC or other groups drive out to rural Georgia and ask them how they got it done. They get it done because we’ve helped convert them into owners of their data.”

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